Obtain a mortgage pre-approval letter
Obtain a mortgage pre-approval letter from your local mortgage banker or private mortgage consultant right away, even if you don’t plan on finding a home immediately.
Determine your timeline
A 60-day period is the average time it usually takes from initially finding your home, signing an attorney rider, until the closing. Sometimes 30 or 90-120 days can be accommodated. This all depends on the buyers’ and sellers’ needs and schedule and can generally be worked out during the negotiation process.
Look for your New Jersey home
Trust your instincts. There is a perfect home in Bergen County for you that meets your needs and fits your budget.
Make an offer
Once you’ve seen all the houses and have located the one home for you, the offer must be made in writing. The contract is completed by your realtor, and includes the details of your offer including price, mortgage terms, deposit amounts, closing date, inclusions, exclusions, inspection contingency and details, etc.
Contract negotiations and acceptance
It is not uncommon for your initial offer to be countered by the seller. It is then that the price and terms are negotiated and communicated via the realtors of both designated parties. Once the specific terms and price have been agreed to, both the buyer and seller sign and initial the revised contract, and the deal is underway.
After the fully executed contract is delivered to the buyer and seller (via fax, email or mail) it is then forwarded to both parties’ attorneys for them to review, generally taking 3 business days. During this period, either party has the option to cancel the contract without facing a penalty. For an eager buyer who really wants their home, it would be in their best interest to promote a speedy attorney review and do what they can to help facilitate this process.
The contract phase and inspection
Once attorney review is completed, you are officially, “under contract”. This is when you complete the mortgage processing step, which includes an appraisal, and scheduling and conducting all of your inspections. One must only use a licensed New Jersey inspector, and schedule immediately (usually while still in the attorney review period) since the inspection, and the attached reports must be generated within a short time period. It is common that one inspector will inspect the home for structural, electrical, plumbing, HVAC and other defects, while also arranging for radon testing, inspecting for termites and other pests, among checking for other environmental concerns. Other inspections may be warranted, such as lead paint hazard testing, additional testing to confirm the roof or fireplace isn’t in need of additional work, searching for underground oil tank and more.
Negotiate for defects
While the inspection is taking place, the inspector may communicate both their positive and negative findings as they go along, but one should still expect a lengthy report once concluded. The report, which has a “to-do” list, may initially seem overwhelming, but many are simple suggestions for continued maintenance and appropriate upgrades. Minor issues are to be expected, but you should generally expect to have a leak-free roof, major systems in working order, and a structurally sound home. If there are major issues such as these mentioned, your attorney and/or agent will work with the sellers’ agent/sellers’ attorney to negotiate repairs or credits to your advantage.
The other details
At this point in the home buying process, your mortgage appraisal has been completed and your final commitment should be available (there is a date in the contract by which you must comply and provide the mortgage commitment). Your attorney will then order the survey, title search and flood certification. At this point, you would call your insurance agent and secure your homeowner’s policy to begin the day of closing. At the closing, you will need to show a paid receipt for the first year’s insurance.
Call the movers and utilities companies
Upon closing, you will be provided with a list of the utility companies so that you can immediately open accounts for gas, electric, phone, cable, water, etc.
Walk through inspection
The walk-through inspection is done just prior to closing. It is important to wait for the sellers to have officially moved out all of their belongings and have vacated the residence.
Coordinate with your attorney how much money you will need to bring to the closing. The money will be in the form of certified funds, bank check or a wire; so it is advised to allow time to coordinate earlier that day for such tasks.
Congratulations! You now own your first dream home!